Michigan Court of Appeals; Docket No. 146004; Unpublished
Judges Brennan, Reilly, and Danhof; Unanimous; Per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
In this unanimous unpublished per curiam Opinion, the Court of Appeals upheld summary disposition in favor of defendant Lufthansa, holding that where an automobile insurance company and an ERISA medical benefit plan have conflicting coordination of benefits clauses, federal preemption applies and the auto carrier's no-fault benefits coverage is primary.
The injured plaintiff was injured in an automobile accident and incurred medical expenses which Allstate, the no-fault insurer, paid in full. The injured plaintiff was also entitled to receive benefits under his employer's medical benefit plan, established pursuant to ERISA. Both the ERISA plan and the no-fault policy contained coordination of benefits provisions, which the parties stipulated conflicted with each other.
Allstate contended that by purchasing "stop loss" insurance coverage, Lufthansa rendered its medical benefit plan an "insured plan" which was not protected by ERISA's "savings clause" from the effect of §3109a.
In affirming the trial court decision in favor of Lufthansa, the Court of Appeals held that the coordination of benefits provision in the ERISA plan was controlling under the United States Supreme Court decision of FMC Corporation v Holliday, 498 US 52,112 L Ed 2d 356 (1990).
The Court of Appeals held that the cases relied upon by plaintiff, Northern Group Services v Auto-Owners, 833 F2d 85 (1987) and Frankenmuth Mutual v Meijer lnc, 176 Mich App 675 (1989) had not survived the subsequent holdings in Lincoln Mutual Casualty Company v Lectron Products Inc, 970 F2d 206 (1992). In that case, the 6th Circuit Court of Appeals held mat an employer's purchase of stop loss insurance did not affect the preempted status of its benefit plan under the ERISA, because to hold otherwise would be to permit the states to directly regulate a benefit plan in contravention of the ERISA. The Michigan Supreme Court followed the holding ACIA v Frederick & Herrud lnc, 443 Mich 358 (1993). Thus, it is settled law that the purchase of stop loss insurance coverage does not transform an ERISA benefit plan into an insured plan.
The Court of Appeals declined to address plaintiffs other argument concerning interpretation of defendant's coordination of benefits provision which plaintiff contended gave deference to state law. The court held that since the parties had stipulated that the coordination of benefits clauses were in conflict, plaintiff could not argue on appeal that the trial court erred in failing to examine the terms of the coordination of benefits clause which arguably lend themselves to a less conflicting interpretation.
Finally, the Court of Appeals held that as a matter of federal common law, where an ERISA plan provides that no-fault insurance is primary where the potential for duplication of benefits occurs, the plan's terms control and the no-fault insurer is primarily liable.